Site Selection https://www.leaseref.com/taxonomy/term/71 en How All Companies Are Finding Flexibility with Terms https://www.leaseref.com/blog/how-all-companies-are-finding-flexibility-terms <div data-history-node-id="496" class="node node--type-blog node--view-mode-rss ds-2col-stacked-fluid clearfix"> <div class="group-header"> <div class="field field--name-node-title field--type-ds field--label-hidden field__item"><h2> How All Companies Are Finding Flexibility with Terms </h2> </div> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field__item"><time datetime="2019-08-11T12:00:00Z" class="datetime">August 11, 2019</time> </div> </div> <div class="group-footer"> <div class="field field--name-field-blog-image field--type-image field--label-hidden field__item"> <img src="/sites/default/files/2019-08/jonathan-wass-headshot.png" width="1090" height="1096" alt="jonathan wasserstrum " typeof="foaf:Image" /> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><p><span><span><span>In recent years, thanks in part to the emergence of and popularity of co-working spaces, commercial real estate has begun to be rethought. Some of those innovative changes are coming from SquareFoot, a technology-powered commercial real estate company that recently crossed our radar.</span></span></span></p> <p><span><span><span>The company, which is <a href="https://www.squarefoot.com/ny/new-york/office-space">headquartered in New York City</a> but works with clients in major cities all over the country, offers greater transparency on its website than has been typically published in the past. </span></span></span></p> <p><span><span><span>You can go to the SquareFoot homepage and search for listings in your area to find out about which neighborhoods nearby have available office spaces and what those spaces cost. Rather than keeping prospective clients in the dark at the start of the search process, SquareFoot gives their clients more information and more insight for comparison.</span></span></span></p> <p><span><span><span>But if the technological component wasn’t enough for disruption, SquareFoot went a step further this season by <a href="https://www.prnewswire.com/news-releases/squarefoot-launches-new-initiative-to-make-office-space-more-accessible-for-growing-companies-300865549.html">introducing FLEX by SquareFoot</a>. I conducted a short interview, below, with SquareFoot Founder / CEO Jonathan Wasserstrum to learn more about how they’re thinking differently than others about lease terms.</span></span></span></p> <p> </p> <h3><span><span><span>Tell us a little bit about your company’s origin.</span></span></span></h3> <p><span><span><span><strong>Wasserstrum:</strong> I started SquareFoot in 2011 while still in business school to tackle an unmet need - businesses that needed office space but weren’t big enough for the big players to work with them. A buddy of mine called me one day asking how he could find office space, knowing that I had worked for several years at JLL before I went to grad school. </span></span></span></p> <p><span><span><span>As I tried to help him, I realized that nobody was really thinking about this market. And I knew that more and more companies were going to be starting their search online so, when I graduated, I decided that SquareFoot would be both my passion project and my next professional pursuit.</span></span></span></p> <p><span><span><span>Since then, we’ve closed over 1,000 deals representing all kinds of companies, small to big. Whatever growth stage your company is about to embark on, we can help you. And as you get bigger, we’ll get you into the next space, too.</span></span></span></p> <p> </p> <h3><span><span><span>What led you to decide to launch FLEX by SquareFoot this year?</span></span></span></h3> <p><span><span><span><strong>Wasserstrum:</strong> We’ve had a number of clients who found office spaces they loved who grew frustrated and despondent after they discovered they’d have to sign a five-year lease or lose out on the space. Ultimately, they’d wind up walking away and starting their search over, hoping to find something else they liked as much.</span></span></span></p> <p><span><span><span>So we determined we could do something about it once and for all. </span></span></span></p> <p><span><span><span>In certain cases, when a client finds the space they want but not the term they desire, we at SquareFoot will sign the lease ourselves to ensure that they can move in. </span></span></span></p> <p><span><span><span>We will then hand them the term they prefer. </span></span></span></p> <p><span><span><span>Our feeling is that it’s better to have more happy clients in the spaces they want, and if we have to fill that space in a few years from our roster of other clients looking for two or three-year leases, we will. We have access to other companies that will be seeking something similar and we always have a pulse on it, enabling us to make smarter bets.</span></span></span></p> <h3><span><span><span>Why hasn’t anyone tried something like this initiative before?</span></span></span></h3> <p><span><span><span><strong>Wasserstrum:</strong> It’s not a trivial, or riskless, matter.  </span></span></span></p> <p><span><span><span>You need to know who is looking for what, where - in order to make the right bets. You need to be in front of people looking for space -- in order to be able to fill it. </span></span></span></p> <p><span><span><span>You need to be able to do it at scale in order to finance it and to have it make sense. In the past, different groups have been able to do different pieces of the puzzle; we’ve been able to put the puzzle together.</span></span></span></p> <p><span><span><span>We know better than anyone what it takes as a company that size because we are a company that size - 55 people and growing - that recently moved offices ourselves. We have long led <a href="/blog/6-tips-negotiating-killer-commercial-lease">lease negotiations</a> on behalf of our clients with empathy. The addition of FLEX now means that the services we offer, and are known for, convey that empathy that we are founded on.</span></span></span></p></div> <div class="bottom-links"> <div class="field--taxonomy-terms clearfix field field--name-field-blog-tags field--type-entity-reference field--label-above"> <div class="field__label">Post Tags</div> <div class="field__items"> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/71" class="taxonomy-term" hreflang="en">Site Selection</a></div> </div> </div> </div> </div> </div> Sun, 11 Aug 2019 12:53:14 +0000 jeff 496 at https://www.leaseref.com 5 Things To Consider Before Leasing Commercial Space https://www.leaseref.com/blog/5-things-consider-leasing-commercial-space <div data-history-node-id="492" class="node node--type-blog node--view-mode-rss ds-2col-stacked-fluid clearfix"> <div class="group-header"> <div class="field field--name-node-title field--type-ds field--label-hidden field__item"><h2> 5 Things To Consider Before Leasing Commercial Space </h2> </div> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field__item"><time datetime="2019-08-10T12:00:00Z" class="datetime">August 10, 2019</time> </div> </div> <div class="group-footer"> <div class="field field--name-field-blog-image field--type-image field--label-hidden field__item"> <img src="/sites/default/files/2019-08/5-things-to-consider-when-leasing-commercial-space.jpg" width="1000" height="667" alt="5 things to consider when leasing commercial space" typeof="foaf:Image" /> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><h1><span><span><span><span lang="EN-US" xml:lang="EN-US" xml:lang="EN-US"><span>5 Things To Consider Before Leasing Commercial Space</span></span></span></span></span></h1> <p><span><span> </span></span></p> <p><span><span>A company's success is heavily impacted by their commercial property location, terms and price. As a business owner looking to rent out a new office space, will need to sign a commercial lease that allows your business to operate profitably. If you struggle to make payments, it could impact the financial health of your business and personal life. After all, breaking a lease could create further complications down the road. Prepare yourself beforehand by getting a professional lease review service and learning the top things to consider before leasing commercial space. </span></span></p> <p><span><span> </span></span></p> <h2><span><span><strong>Your Neighbors</strong></span></span></h2> <p><span><span>One of the most crucial things to consider before leasing commercial space is your neighbors. The typical business owner focuses solely on the office or retail premises itself. </span></span></p> <p><span><span>They neglect the outside factors that could negatively affect their business. If you move into a commercial space that neighbors another business that offers similar services, you could lose customers. </span></span></p> <p><span><span>In contrast, you could gain more customers if your neighbors bring you excessive amounts of foot traffic. In this case, you should request a co-tenancy clause in your lease. </span></span></p> <p><span><span>That way, you have the right to break the lease if your traffic-driving neighbor relocates. Keep your neighbors in mind when <a href="https://www.leaseref.com"><strong>reviewing your commercial lease</strong></a>. </span></span></p> <p><span><span> </span></span></p> <h2><span><span><strong>The CAM Terms</strong></span></span></h2> <p><span><span>Business owners also need to consider <a href="/article/base-rent-vs-net-rent-vs-minimum-rent-vs-gross-rent"><strong>CAM (common area maintenance)</strong></a> terms before leasing commercial property. Landlords often try to charge more through maintenance fees. </span></span></p> <p><span><span>Small businesses pay more when landlords alter their maintenance fees depending on how many offices are vacant in their buildings. If you want to get the best deal possible, ask your landlord or listing broker how they establish maintenance fees. </span></span></p> <p><span><span>If it is not based on the percentage of the commercial building that you plan to rent, you need to negotiate. Take the time to review your CAM terms before leasing a commercial space. </span></span></p> <p><span><span> </span></span></p> <h2><span><span><strong>Improvement Costs</strong></span></span></h2> <p><span><span>Moreover, look into the <a href="/blog/tenant-improvement-allowance-complete-guide"><strong>improvement cost terms</strong></a> in a lease before signing it. Typically, landlords pay for several improvements that business owners need done to their spaces and then roll the expenses into the tenants' rents. </span></span></p> <p><span><span>When landlords operate this way, tenants are often caught off-guard. </span></span></p> <p><span><span>Therefore, you need to speak with your potential landlord about their improvement cost structure. </span></span></p> <p><span><span>You might be able to negotiate based on the current state of your office and term of the lease. Then, you can reduce your potential move-in or start-up costs. Inquire about these expenses before signing a lease for commercial space. </span></span></p> <p><span><span> </span></span></p> <h2><span><span><strong>Dispute Resolution</strong></span></span></h2> <p><span><span> </span></span><span><span>The best commercial leases contain good dispute resolutions. When business owners sign leases that do not include resolution options, they end up facing overwhelming litigation costs. To avoid dealing with the stress and costs of a lawsuit, ensure that your lease contains good dispute resolutions. </span></span></p> <p><span><span>Popular options include mediation and arbitration in place of court proceedings. The difference in mediation and arbitration lies in the third party's ability to make decisions. Mediators work with landlords and tenants to come to common terms. They do not make decisions for their clients like arbitrators do. Satisfied business owner tenants consider dispute resolutions before leasing commercial property. </span></span></p> <p><span><span> </span></span></p> <h2><span><span><strong>Sublease Terms</strong></span></span></h2> <p><span><span>In addition to the above things to consider before leasing commercial space, review the <strong><a href="/blog/4-crucial-steps-subletting-your-commercial-space">sublease terms</a></strong>. Landlords sometimes leave this clause out of their leases completely. However, business owners benefit from subleasing their commercial spaces for numerous reasons. </span></span></p> <p><span><span>For instance, business owners who cannot afford their rent can minimize it without falling into debt by subleasing their space. When companies expand, owners often turn to subleasing as a way to avoid <a href="/blog/can-i-cancel-my-commercial-lease"><strong>breaking their lease</strong></a>. Then, they can relocate and continue to grow without having to pay unnecessary, large fees. You need to consider this factor before leasing commercial property to prepare for both business loss and growth. </span></span></p> <p> </p> <h2>Conclusion</h2> <p><span><span>Business owners' commercial leases can either drive them toward their goals or push them further away from them. With that being said, you need to consider several factors before signing on the dotted line. </span></span></p> <p><span><span>Firstly, you need to take a look at your potential neighbors and determine how they might affect your business traffic. Then, examine the CAM terms in your lease, making sure that the fees are based on the percentage of the property you are renting. Inquire about the improvement costs and negotiate when necessary. </span></span></p> <p><span><span>Good dispute resolutions can save tenants and landlords both substantial amounts of capital when they allow them to avoid court proceedings entirely. </span></span></p> <p><span><span>Finally, you can prepare for business loss and expansion by gaining the ability to sublease your office space. If you take these things into consideration before leasing commercial property, you can set yourself up for success.</span></span></p> <p> </p></div> <div class="bottom-links"> <div class="field--taxonomy-terms clearfix field field--name-field-blog-tags field--type-entity-reference field--label-above"> <div class="field__label">Post Tags</div> <div class="field__items"> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/71" class="taxonomy-term" hreflang="en">Site Selection</a></div> </div> </div> </div> </div> </div> Sat, 10 Aug 2019 14:17:38 +0000 jeff 492 at https://www.leaseref.com How to Negotiate a Yoga Studio Lease https://www.leaseref.com/blog/how-negotiate-yoga-studio-lease <div data-history-node-id="454" class="node node--type-blog node--view-mode-rss ds-2col-stacked-fluid clearfix"> <div class="group-header"> <div class="field field--name-node-title field--type-ds field--label-hidden field__item"><h2> How to Negotiate a Yoga Studio Lease </h2> </div> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field__item"><time datetime="2017-05-30T12:00:00Z" class="datetime">May 30, 2017</time> </div> </div> <div class="group-footer"> <div class="field field--name-field-blog-image field--type-image field--label-hidden field__item"> <img src="/sites/default/files/2017-05/yoga-studio-lease.jpg" width="1000" height="667" alt="negotiate yoga studio lease" typeof="foaf:Image" /> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><h1>How to Negotiate a Yoga Studio Lease</h1> <p>So you want to open a yoga studio and therefore you need to negotiate a commercial yoga studio lease.<span>  </span>As a yoga studio is a unique use, there are unique challenges to be dealt with in the lease negotiation with the landlord.<span>  </span></p> <p>Here are some of the most important issues to consider.<span>  </span></p> <h3>Yoga Exclusivity Lease Clause</h3> <p>Obviously it would not be good business for a landlord to have two yoga studios in the same building.<span>  </span></p> <p>But what about any ancillary services you may want to offer?<span>  </span></p> <p>For example, what if you want to open or license a juice bar within your studio?<span>  </span>Your lease may restrict food uses.<span>  </span></p> <p>What if you want to sublet a portion of your space to a chiropractor, naturopath, massage therapist, physiotherapist, psychotherapist or any other health care professionals?<span>  </span></p> <p>You may even want to negotiate for the exclusion of any other fitness related uses.<span>  </span>What if a gym opens up in the same complex and they offer yoga?<span>  </span>You would certainly want your exclusivity clause to be as broad as possible.<span>  </span></p> <p> </p> <p><img alt="negotiate-yoga-studio-lease.jpg" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/negotiate-yoga-studio-lease.jpg" /></p> <h3> </h3> <h3>Landlord Relocation Right</h3> <p>Landlords have the ability to <a href="/article/landlords-right-relocate-you-what-you-need-know">relocate tenants</a> embedded into their standard lease templates.<span>  </span></p> <p>This allows them to shuffle tenants around to accommodate for the growth of some tenants.<span>  </span></p> <p>The problem with a yoga studio is that the space is much more specific to the needs of the customers.<span>  </span>Having it relocated within the building or complex could be extremely detrimental for business.<span>  </span></p> <p>Therefore we would recommend that a clause be inserted into the letter of intent or offer to lease that explicitly states that the lease will not have a landlord right to relocate the premises.<span>  </span></p> <p>Something like this:</p> <p><em>The lease shall not contain a landlord's right or a provision to relocate the Premises.<span>  </span></em></p> <h3> </h3> <h3>Deposit</h3> <p>A normal lease has two months...either first and last, or first and security deposit.<span>  </span>In some rare cases landlords are willing to agree to no deposit, but that is normally only if they are extremely desperate and the tenant is also extremely creditworthy.<span>  </span></p> <p>Aim for two months deposit, and try to ensure it applies to first and last months rent, as opposed to first and security deposit.<span>   </span><span> </span></p> <h3> </h3> <h3>Personal Guarantee</h3> <p>Although a personal guarantee may be insisted upon by some landlords, the purpose of having companies is to avoid personal liability.<span>  </span></p> <p>If the landlord is insisting on a personal guarantee, it might be wise to just walk away from the deal, or come up with some creative ways around the guarantee.<span>  </span></p> <p>One solution is to provide a hefty rental deposit.<span>  </span>While first and last months rent is normal, a beefed up rental deposit may be something like first month, last month and 2-3 more months.  More on how to navigate a personal guarantee in a yoga studio lease <a href="/blog/personal-guarantees-commercial-leases-complete-guide">here</a>. </p> <p> </p> <p><img alt="yoga-studio-rent-deposit.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/yoga-studio-rent-deposit.PNG" /></p> <p> </p> <p>It would then be advisable to have those extra months worth of rent start to apply during the term...for example, month 6, month 13, month 18, etc.<span>  </span></p> <p>You could also provide a letter of credit, which freezes money in your bank account.<span>  </span>If you go this route, we would recommend that it decline over time, just like the deposit example above.<span>  </span></p> <p>The theme here is that the longer you are in the yoga studio paying rent, the more of a return the landlord has received and the less of your money he should be holding on to.<span>  </span></p> <p>A lot will depend on the landlord?s risk on the deal.<span>  </span>Is he paying a real estate brokerage commission?<span>  </span>Is he spending money on the yoga studio to improve it?<span>  </span>Is he providing a cash or <a href="/blog/tenant-improvement-allowance-complete-guide">tenant inducement allowance</a> so you can improve the space?<span>  </span></p> <p>If you agree to spend your own money and there are no real estate commissions, the landlord's risk is minimized and therefore your odds of not having to sign a personal guarantee are maximized.<span>  </span></p> <h3> </h3> <h3>Yoga Membership</h3> <p>If you are just starting a yoga studio for the first time, it would be wise to grow the membership as much as possible before launching.<span>  </span>This will put the landlord a bit more at ease that you will have the ability to pay the rent.<span>  </span></p> <p>This is a catch 22 however, since not many people will sign up for your yoga studio before you have secured a location.<span>  </span></p> <p>You will need to sell the landlord on who you are, your background, and provide evidence that you have enough of a following and expertise that you will be able to grow a healthy customer base.<span>  </span></p> <p>You will also need to provide a solid business plan that shows that you have done your research on the viability for a yoga studio in this location.<span>  </span>What do the demographics look like?<span>  </span>What about the psychographics of the people nearby?<span>  </span>Purchasing power?<span>  </span>What does the competition look like?<span>  </span>Do you have a solid pricing strategy?</p> <p>If you are a start up, many landlords will not want to even bother with the risk of leasing the space to you.<span>  </span>So you have to ensure that you sell yourself and why it is a wise investment for the landlord.<span>  </span></p> <p> </p> <p><img alt="yoga-lease.jpg" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/yoga-lease.jpg" /></p> <h3> </h3> <h3>Making Good: A Yoga Studio's Demolition Obligation</h3> <p>Most commercial leases have a makegood provision, which is the tenant?s obligation to <a href="/article/restoration-expensive-exit-cost-most-tenants-have">restore the premises back to base building condition</a> at the end of the lease term.</p> <p>Although yoga studios are primarily open concept, the demolition costs could add up with respect to taking out the changerooms, lockers and the flooring.<span>  </span></p> <p>Although it is common to have such a clause in the lease, we would suggest trying to remove this clause before you sign the lease and start your <a href="/blog/what-difference-between-fixturing-period-and-free-rent-period">tenant fixturing period</a> - when you have negotiating leverage.<span>  </span></p> <h3> </h3> <h3>Hours and Use</h3> <p>Ensure the lease is very clear on the business hours you can operate and the range of uses that are covered.<span>  </span></p> <p>For instance, is the landlord aware of hot yoga?<span>  </span>Would performing hot yoga during the day affect other tenants in the building or complex?<span>  </span>What about other forms of yoga such as naked yoga?</p> <p>Also be sure that your use will not elicit any accessibility issues, or if they do, it will be at the landlord's expense.<span>  </span>You would not want to be responsible for handicapped accessible ramps around the building...you want to ensure that the landlord has a compliance with laws clause embedded within the lease and that such costs are at the landlord's expense.<span>  </span></p> <p> </p> <p><a href="https://www.leaseref.com/how-it-works" target="[objectObject]"><img alt="commercial-lease-review.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-lease-review.PNG" /></a></p> <h3> </h3> <h3>Picking the Right Yoga Studio Location</h3> <p>It would be wise to evaluate the strategies and successes of other yoga studios.<span>  </span>Do the highly exposed and well located yoga studios do well?<span>  </span></p> <p>What about the yoga locations that are hard to find?<span>  </span>Are they successful?<span>  </span>Is their success due to word of mouth, culture, or through digital success?<span>  </span></p> <p>You can find out the local Google search volume through keywords planner.<span>  </span>If there are few competitors and people tend to find yoga studios through web searches, then you may not have to pay for prime real estate.<span>  </span></p> <p>On the other hand, customers may want to visit a prominent location, and word of mouth is easier to spread when people can talk about a well known and visible property.</p> <p> </p> <p><img alt="yoga-studio-location.jpg" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/yoga-studio-location.jpg" /></p> <h3> </h3> <h3>Signage</h3> <p>Whether well located or not, make sure to know what your signage rights are so that people can easily find you once they are near your location.<span>  </span></p> <p>Some leases have extremely ambiguous wording with respect to tenants signage rights, and in some extreme cases tenants are disappointed to find out they do not get access to the general podium sign for the complex.<span>  </span></p> <h3> </h3> <h3>Renewal Rights</h3> <p>As your location becomes such an important part of your business, you should try to negotiate for two rights to <a href="/article/renewing-your-commercial-lease-what-you-need-know">renew the lease</a>.<span>  </span></p> <p>For instance, a 5 year lease with two rights to renew at 5 years each, or a 10 year term with two rights for 5 years each.<span>  </span>If you are more comfortable with shorter terms then perhaps two terms of three years each is more appropriate.<span>  </span></p> <p>The renewal rights can either be fixed or at fair market rates.<span>  </span></p> <p> </p> <p><img alt="yoga-studio-lease-review.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/yoga-studio-lease-review.PNG" /></p> <h3> </h3> <h3>HVAC and Building Systems (suitable for yoga studios)</h3> <p>Does the building have up to date heating, ventilating and air conditioning?<span>  </span>It would be wise to have an HVAC professional help evaluate if the building has proper ventilating for your use.<span>  </span>You can find out more about this at the <a href="https://www.ashrae.org/about-ashrae" target="_blank">ASHRAE website</a>.<span>  </span></p> <p>On the flip side, if you want to offer hot yoga, is that something that the building is capable of providing during the months where no other tenants in the building are using heat?<span>  </span></p> <h3> </h3> <h3>Useable vs Rentable Area of the Yoga Studio</h3> <p>Tenants have a useable area (the square footage within their premises), and a rentable area (what a tenant actually pays rent on).<span>  </span>The difference between the two is the amount of common area assigned to a suite.<span>  </span></p> <p>Normal "gross up" between useable and rentable areas is about 15%.<span>  </span>Be sure to ask your landlord what the building <a href="/article/biggest-scam-commercial-real-estate-case-growing-building">gross up factor</a> is.</p> <h3> </h3> <h3>Yoga Studio Insurance</h3> <p>Have your insurance provider review the insurance clause within the lease.<span>  </span>Coverage normally ranges from $2M - $5M.<span>  </span>You can find out more information on insurance <a href="https://www.yogaalliance.org/Learn/Article_Archive/Do_I_Really_Need_Liability_Insurance" target="_blank">here</a>.<span>  </span></p> <h3> </h3> <h3><span>Yoga Studio Lease Review</span></h3> <p>Still stuck?<span>  </span>Find out how we can help.  We would be happy to provide you with a yoga studio <a href="https://www.leaseref.com/">lease review</a>. </p> <p> </p> <p><img alt="commercial-lease.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-lease.PNG" /></p> <p> </p> <p><a href="https://www.leaseref.com/how-it-works" target="[objectObject]"><img alt="yoga-lease-review.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/yoga-lease-review.PNG" /></a></p> <p> </p></div> <div class="bottom-links"> <div class="field--taxonomy-terms clearfix field field--name-field-blog-tags field--type-entity-reference field--label-above"> <div class="field__label">Post Tags</div> <div class="field__items"> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/72" class="taxonomy-term" hreflang="en">Negotiating</a></div> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/71" class="taxonomy-term" hreflang="en">Site Selection</a></div> </div> </div> </div> </div> </div> Tue, 30 May 2017 20:53:13 +0000 jeff 454 at https://www.leaseref.com Why 22% of Commercial Listing Agents Will Not Even Call You Back https://www.leaseref.com/blog/why-22-commercial-listing-agents-will-not-even-call-you-back <div data-history-node-id="445" class="node node--type-blog node--view-mode-rss ds-2col-stacked-fluid clearfix"> <div class="group-header"> <div class="field field--name-node-title field--type-ds field--label-hidden field__item"><h2> Why 22% of Commercial Listing Agents Will Not Even Call You Back </h2> </div> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field__item"><time datetime="2018-01-15T12:00:00Z" class="datetime">January 15, 2018</time> </div> </div> <div class="group-footer"> <div class="field field--name-field-blog-image field--type-image field--label-hidden field__item"> <img src="/sites/default/files/2017-04/why-22%25-of-commercial-listing-agents-will-not-even-call-you-back.jpg" width="1000" height="667" alt="commercial real estate listing agents do not call back" typeof="foaf:Image" /> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Service levels in commercial real estate can leave much to be desired.  This post is a study completed to examine just how bad it can be and the reasons why.  Hint: you will appreciate the value of a tenant broker a little more after reading this. </p> <p><strong>Our Objective</strong></p> <p>We set out to measure just two things...response time and response rate to queries regarding available office space for lease.  As <a href="https://www.leaseref.com/">experts in commercial real estate leasing</a>, we know service can be poor, but nobody has really done a study to quantify it. </p> <p><strong>What We Measured</strong></p> <p>1.       How bad is it for commercial real estate agents trying to find space for a client?</p> <p>2.       Is it any better or worse for the tenants who do not have representation?</p> <p>3.       Does email work better than voicemail?</p> <p>4.       Is there any service improvement for larger tenants?    </p> <p><strong>Setting It Up</strong></p> <p>We took the following steps in order to run as unbiased of study as possible:</p> <p>1.       First we needed a real commercial real estate agent, and one of our staff members volunteered.  He has 16 years of commercial real estate experience and is well respected in his city.    </p> <p>2.       We also needed a prospective tenant that would make enquiries about space that was unknown to the market in question.  One of our staff members filled that role. </p> <p>3.       We ensured that the gender was the same. </p> <p>4.       Selecting the spaces to call was randomized.  We printed a survey of available options in the market, cut it up into pieces - each piece showing the building and suite, and then pulled them out of a hat, one by one. </p> <p>5.       For each target, both the broker and the tenant would contact the listing agent in the same way...either both by email or both by voicemail. </p> <p>6.       We had two email templates and two voicemail templates so that we were not sending the exact same message.  We alternated who used which template, and who contacted the agent first. </p> <p>7.       We decided that 100 sample inquiries for each category would be enough of sample size to see some credible results. </p> <p>8.       The requirements for the inquiries would be 2,000 to 2,500 square feet and 5,000 to 6,000 square feet. </p> <p>9.       The study was conducted over a full month to spread out the inquiries evenly over each business day.  Starting times for inquiries were alternated, starting at 9am and 1pm to ensure an even distribution of contact throughout the day. </p> <p>As you can see, the total number of inquiries was 800, broken down in the following categories:</p> <p><img alt="commercial-space-inquiries-tenant-vs-broker.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-space-inquiries-tenant-vs-broker.png" /></p> <p>Here are the email templates we used:</p> <p><strong>Template 1</strong></p> <p><em>Hi Mark,</em></p> <p><em>I trust you are well.  I noticed your sign on &lt;address&gt;.  I am looking for 2,000 to 2,500 square feet of space with 3 offices and a boardroom.  Can you please let me know if you have space that could work and attach a floor plan if you have one?  </em></p> <p><em>Thanks,</em></p> <p><strong>Template 2</strong></p> <p><em>Hi Mark,</em></p> <p><em>I am looking for 2,000 to 2,500 square feet of space for 3 offices and a boardroom.  Do you have a floor plan and marketing flyer you can send me?  </em></p> <p><em>Thanks,</em></p> <p>Note that the second email is a bit shorter, more to the point and a bit less friendly.  The voicemails had matching words. </p> <p><strong>Our Findings</strong></p> <p><strong>1 - There is a benefit to working with a broker.</strong>  The voicemail and email response rates were both better and the broker heard back more than a full day sooner.    </p> <p><img alt="commercial-listing-agent-response-rates.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-listing-agent-response-rates.png" /></p> <p><strong>2 - Email trumps voicemail.</strong>  Email response rates were higher and response times were quicker.  We looked into how many emails were replied by the agents via smart phones: 72%.  As listing agents are out showing space, it is painful for them to come back to the office, check voicemails and get back to people.    </p> <p><img alt="listing-agents-respond-by-smart-phone.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/listing-agents-respond-by-smart-phone.png" /></p> <p><strong>3 - The larger the tenant, the better the service.</strong>  We were not surprised about this one as the listing agent's commission is tied to the size of the space.  There was an improvement in responses for both the broker and the tenant.  We did notice however that the service level for the tenant looking for the larger space jumped dramatically, while the broker had only modest improvement.  We suspect that the improvement in responsiveness has to do with the size of the tenant and their lack of representation.  If a 5,000 square foot tenant calls a building without a broker, there is an opportunity to show the space and then try to <a href="/blog/5-reasons-why-you-should-not-call-signs-buildings">become that tenant's agent</a>. </p> <p><img alt="larger-commercial-tenants-get-better-service.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/larger-commercial-tenants-get-better-service.png" /></p> <p><strong>4 - Tenants should be nice.  Brokers should be direct.</strong>  The longer, friendlier email and voicemail were more successful for the tenant, but the more direct templated worked better for the broker.   </p> <p><strong>Post Study Follow Up</strong></p> <p>We never actually toured any office space.  We approached the listing agents who did not even respond to our inquiries, came clean about the study and asked them why we did not receive a response.  Here are the categories of responses:</p> <p><img alt="why-commercial-listing-agents-do-not-call-back.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/why-commercial-listing-agents-do-not-call-back.png" /></p> <p><strong>Conclusions</strong></p> <p>If you are touring buildings without a real estate agent, expect that you will not hear back from all agents.  Most signs on buildings have phone numbers and not email addresses, but if you can find the agent's email you will have more success.  Be sure to be as friendly as possible and be as specific as you can...agents will discount you if they feel that you are a flakey tenant. </p> <p>If you have hired an agent, also expect that they will not hear back from every listing broker, so follow up with him or her on sites that they have inquired about and have not yet received the details. </p> <p> </p> <p><img alt="commercial-lease.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-lease.PNG" /></p></div> <div class="bottom-links"> <div class="field--taxonomy-terms clearfix field field--name-field-blog-tags field--type-entity-reference field--label-above"> <div class="field__label">Post Tags</div> <div class="field__items"> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/71" class="taxonomy-term" hreflang="en">Site Selection</a></div> </div> </div> </div> </div> </div> Sun, 16 Apr 2017 01:00:28 +0000 jeff 445 at https://www.leaseref.com How to Find 61% More Office Space Options https://www.leaseref.com/blog/how-find-61-more-office-space-options <div data-history-node-id="444" class="node node--type-blog node--view-mode-rss ds-2col-stacked-fluid clearfix"> <div class="group-header"> <div class="field field--name-node-title field--type-ds field--label-hidden field__item"><h2> How to Find 61% More Office Space Options </h2> </div> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field__item"><time datetime="2017-05-15T12:00:00Z" class="datetime">May 15, 2017</time> </div> </div> <div class="group-footer"> <div class="field field--name-field-blog-image field--type-image field--label-hidden field__item"> <img src="/sites/default/files/2017-04/how-to-find-61%25-more-space-options.jpg" width="1000" height="667" alt="finding more office space for lease options" typeof="foaf:Image" /> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>Technology has dramatically improved most industries.<span>  </span>Commercial real estate?<span>  </span>Not so much.<span>  </span></p> <p>Despite industry curators, finding space is still time-intensive, annoying and frustrating.<span>  </span>The <a href="/blog/8-reasons-you-should-use-agent-instead-internet-find-your-space">internet is filled with stale information</a>, a lack of pertinent details for listings and does not even come close to covering the whole market.<span>    </span></p> <p>This post exams in greater detail a tenant searching for space vs a commercial real estate broker.<span>  </span><span>  </span></p> <p>59% of tenants start their search for space online.</p> <p><img alt="start-the-commercia-space-search-online.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/start-the-commercia-space-search-online.png" /></p> <p><span>We searched for 2,000 square feet of office space.<span>  </span>It was in a market with one of our Lease Ref <a href="https://www.leaseref.com/">expert lease reviewers</a>.<span>  </span></span></p> <p><span>Here are the steps we took:</span></p> <p><span><span>1.<span>       </span></span></span><span>Search with the gold standard of databases for his market.<span>  </span></span></p> <p><span><span>2.<span>       </span></span></span><span>Looked through his email folder (which keeps all emails for the last 3 months).<span>  </span></span></p> <p><span><span>3.<span>       </span></span></span><span>Call or email his list of landlords that do not market very well.</span></p> <p><span><span>4.<span>       </span></span></span><span>Query the local real estate board, which is mostly residential and store-front retail.</span></p> <p><span><span>5.<span>       </span></span></span><span>Walk-by study of the area for signs on buildings.<span>  </span></span></p> <p><span>Then:</span></p> <p><span><span>6.<span>       </span></span></span><span>Turn to google and search like a tenant without a broker would search.</span></p> <p><img alt="commercial-real-estate-search-methods.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-real-estate-search-methods.png" /></p> <p><span>Here is what we found:</span></p> <p>The gold standard database did a pretty good job covering most of the market, and for the lazy broker, it looks like it will cover about 80% of the market.<span>  </span>There were 100 properties that we found and 81 of them were in the gold standard database. <span>  </span></p> <p><img alt="most-search-results-were-found-from-the-main-database.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/most-search-results-were-found-from-the-main-database.png" /></p> <p><span>Note that direct email from listing agents and landlords was the second-best source.<span>  </span>That was due to the sum of the independent landlords, boutique brokerages and residential brokers (with the odd commercial listing).<span>  </span>Those residential agents appear to be more comfortable (at least in this study) to directly email agents rather than utilize the other channels. </span></p> <p><span>The sum of the digital channels (steps 1-4) covered 99% of the options and just one option was discovered by the walk-by study.<span>  </span></span></p> <p><img alt="commercial-real-estate-search-results.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-real-estate-search-results.png" /></p> <p><span>Note that if we found a building through our other methods AND they had a sign on the building, we already counted it so we did not double count.<span>  </span>In other words, we wanted to find the buildings that you can ONLY find by seeing the sign.<span>  </span></span></p> <p><span>It should also be noted that there is a relationship with the quality of the building and space and its visibility online.<span>  </span>If the building cannot be found through any of the digital means above, it is probably a building that is not in great shape and not managed well.</span></p> <p><span>Here is where the study gets interesting.<span>  </span>We then put our tenant cap on and searched as a tenant would.<span>  </span>We ended up on the top free industry curation site (who we will not mention).<span>  </span></span></p> <p><span>Here is how the broker's main database compares with a tenant's main database:</span></p> <p><img alt="broker-database-vs-tenant-database.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/broker-database-vs-tenant-database.png" /></p> <p><span>Additionally, the broker's database was more fresh (fewer expired listings):</span></p> <p><img alt="expired-commercial-listings.png" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/expired-commercial-listings.png" /></p> <p><span>If a tenant ends their space search with just the free website they would have missed out on 19 options than if they had engaged a commercial real estate agent (81 vs 62), and would have spent more time looking at listings that were not on the market (18 vs 5).<span>  </span></span></p> <p><strong><span>Conclusion</span></strong></p> <p><span>In this study, 38 more options, or 61% more spaces were discovered through the real estate agent search process than the tenant approach (assuming the tenant only searches online and does not complete the walk-by study).<span>  </span></span></p> <p><span>Note that not all real estate brokers will take all of the steps above, but a good <a href="/blog/tenant-representation-complete-representation-agreement">tenant rep broker</a> certainly can uncover significantly more options than a tenant relying on free internet resources.  <span>  </span></span></p> <p><img alt="commercial-lease.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-lease.PNG" /></p></div> <div class="bottom-links"> <div class="field--taxonomy-terms clearfix field field--name-field-blog-tags field--type-entity-reference field--label-above"> <div class="field__label">Post Tags</div> <div class="field__items"> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/71" class="taxonomy-term" hreflang="en">Site Selection</a></div> </div> </div> </div> </div> </div> Sat, 15 Apr 2017 22:51:06 +0000 jeff 444 at https://www.leaseref.com 8 Reasons Why You Should Not Rent Commercial Loft Space https://www.leaseref.com/blog/8-reasons-why-you-should-not-rent-commercial-loft-space <div data-history-node-id="441" class="node node--type-blog node--view-mode-rss ds-2col-stacked-fluid clearfix"> <div class="group-header"> <div class="field field--name-node-title field--type-ds field--label-hidden field__item"><h2> 8 Reasons Why You Should Not Rent Commercial Loft Space </h2> </div> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field__item"><time datetime="2017-04-14T12:00:00Z" class="datetime">April 14, 2017</time> </div> </div> <div class="group-footer"> <div class="field field--name-field-blog-image field--type-image field--label-hidden field__item"> <img src="/sites/default/files/2017-04/171%20John%20Street%203.JPG" width="3264" height="2448" alt="reasons why not to rent commercial loft space" typeof="foaf:Image" /> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><h2>Do you really want to rent commercial loft space?</h2> <p>We all would love to rent commercial loft space, converted warehouse and <strong><a href="/glossary-category?title=brick+and+beam&amp;field_term_target_id=All">brick and beam space</a></strong> for an office space use.<span>  </span>It has such character.<span>  </span>There are usually great stories associated with the buildings, such as how cheap they were to buy or what the original use was - such as manufacturing cars in an urban center, or an army of sewing machines and no air conditioning.<span>  </span></p> <p>When the buildings are converted to commercial loft space they have the old school charm with some modern elements, such as brand new windows and newly varnished floors.<span>  </span></p> <p>It is also amazing what a sand blast to the bricks will do to liven up the building.<span>  </span></p> <p>And on top of all of that, they tend to trade at a discount to the <strong><a href="/blog/what-difference-between-and-b-class-buildings">A and B class buildings</a></strong> in a city's downtown core.<span>  </span></p> <p>So why wouldn't everyone want to rent such space for their business?<span>  </span></p> <h2> </h2> <h2>Top Reasons Not to Rent Loft Space</h2> <h3> </h3> <h3>Acoustics</h3> <p>Unless you are on the top floor, there is a constant buzz of people above you walking and providing you with a steady stream of creeking sounds all day long when you are in a commercial loft space.<span>  </span></p> <p>While it is not annoying at first, after you have spent a 5 year lease with fast walkers, heavy walkers, high heels and rolling chairs twelve feet above your head all day long, you may like the acoustic barrier modern concrete buildings offer.<span>  </span></p> <p>What is more is that a conventional office building offers a dropped, T-bar ceiling, which offers better sound attenuation.<span>  </span>Such sound baffling tiles are typically not to be found in loft style buildings.</p> <p> </p> <p><img alt="t-bar-ceilings-offer-noise-buffering.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/t-bar-ceilings-offer-noise-buffering.PNG" /></p> <h2><img alt="loft-space-ceilings.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/loft-space-ceilings.PNG" /></h2> <h3> </h3> <h3>HVAC in Loft Buildings</h3> <p>While <strong><a href="/glossary-category?title=hvac&amp;field_term_target_id=All">HVAC</a></strong> units can be replaced, brick and beam buildings are simply a little too hot in the summer and too cold in the winter.<span>  </span></p> <p>Conventional buildings have their challenges as well, but old, commercial loft spaces are simply worse.<span>  </span></p> <p>Some have outdated HVAC systems, but the building itself is at a disadvantage to modern buildings simply because of the building envelope.<span>  </span></p> <h3> </h3> <h3>Views</h3> <p>There is a relationship between the age of the building and the number of floors.<span>  </span></p> <p>Older buildings were built smaller when there was not as much office space demand.<span>  </span></p> <p>There was also more land available, and most of the buildings were built for an industrial use.<span>  </span></p> <p>So they tend to be lower to the ground, and many of them have a "Manhattan view" - another building is immediately adjacent.<span>  </span>Traditional towers that rise high into the sky tend to have more unobstructed views and better set backs.<span>  </span></p> <p> </p> <p><img alt="the-manhattan-view.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/the-manhattan-view.PNG" /></p> <h3> </h3> <h3>Floor Plate Size in Loft Buildings</h3> <p>There is also a relationship between the age of a building and the square feet per floor.<span>  </span></p> <p>The older the building, the smaller the floor.<span>  </span>As a company grows they tend to out grow these kinds of buildings. </p> <p>So commercial loft space tends to be better suited for small tenants.</p> <p>So even if you are able to negotiate <strong><a href="/blog/right-first-refusal-complete-tenant-guide">flexible expansion rights</a></strong>, there may not be enough space to expand into.</p> <h3>Smaller Landlords</h3> <p>The smaller and older the building, the more likely that a smaller landlord owns it.<span>  </span></p> <p>Small landlords are just to small to own the big towers.<span>  </span></p> <p>While some small landlords are great, there are plenty of independent landlords who are stubborn, ungrateful and difficult to deal with.<span>  </span>Often these landlords will employ family members for property management - people who do not fear for their jobs...and if that is the case, you will not receive outstanding customer service.<span>  </span></p> <p><span>There is also a relationship between the size of a landlord and the odds of retaining a <strong><a href="/blog/tenant-improvement-allowance-complete-guide">tenant inducement allowance</a></strong> - the larger the landlord, the greater the odds of achieving some cash to build out the space.  </span></p> <p>The size and sophistication of leases for smaller landlords is also different than larger landlords. </p> <p>While leases tend to be shorter, the issue with smaller landlords is that they tend to not cover certain clauses or do not cover them in the same depth as larger landlords. </p> <p>Both of which can be a problem for tenants - we would recommend a <strong><a href="https://www.leaseref.com/">commercial lease review</a></strong> before entering into a lease with any loft space landlord to uncover what is missing or should be modified.   </p> <h3> </h3> <h3>Washrooms</h3> <p>When touring office space, many tenants forget to view the washrooms.<span>  </span>They might be renovated, but as a general rule they will certainly be much smaller than modern office buildings.<span>  </span></p> <p> </p> <p><img alt="loft-space-washrooms.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/loft-space-washrooms.PNG" /></p> <h3> </h3> <h3>Accessibility</h3> <p>As a general rule loft style office buildings are not very wheel chair accessible.<span>  </span></p> <p>In fact, some do not even have an elevator, especially if the building is small and the economics of installing an elevator do not make sense. </p> <p>Most loft buildings are "grandfathered" so don't expect this problem to go away any time soon.</p> <h3> </h3> <h3>Moving In</h3> <p>This is a double whammy.<span>  </span>The elevators tend to be much smaller than modern buildings and the loading area is usually tight or non-existent. </p> <p>Tenants in brick and beam buildings are often limited to the kind of furniture they can move into the building.  <span>  </span></p> <h3> </h3> <h3>Conclusion on Leasing Commercial Loft Space</h3> <p>We all love loft / brick and beam buildings.  But while you may fall in love with these spaces during your office space tour, there are considerations to keep in mind - the tour lasts 20 minutes...your commercial lease is for many years.</p> <p>Stuck on a lease problem?  Whether it has to do with commercial loft space or not, let us know if we can help - this video explains our process...</p> <p> </p> <div class="video-embed-field-responsive-video"><iframe width="854" height="480" frameborder="0" allowfullscreen="allowfullscreen" src="https://fast.wistia.com/embed/iframe/shueekaldg?autoplay=0"></iframe> </div> <p> </p> <p><img alt="commercial-lease.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-lease.PNG" /></p></div> <div class="bottom-links"> <div class="field--taxonomy-terms clearfix field field--name-field-blog-tags field--type-entity-reference field--label-above"> <div class="field__label">Post Tags</div> <div class="field__items"> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/71" class="taxonomy-term" hreflang="en">Site Selection</a></div> </div> </div> </div> </div> </div> Fri, 14 Apr 2017 19:46:23 +0000 jeff 441 at https://www.leaseref.com Why 42Floors Will Power Your Next Office Space Search https://www.leaseref.com/blog/why-42floors-will-power-your-next-office-space-search <div data-history-node-id="438" class="node node--type-blog node--view-mode-rss ds-2col-stacked-fluid clearfix"> <div class="group-header"> <div class="field field--name-node-title field--type-ds field--label-hidden field__item"><h2> Why 42Floors Will Power Your Next Office Space Search </h2> </div> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field__item"><time datetime="2017-04-05T12:00:00Z" class="datetime">April 05, 2017</time> </div> </div> <div class="group-footer"> <div class="field field--name-field-blog-image field--type-image field--label-hidden field__item"> <img src="/sites/default/files/2017-04/42floors-logo.png" width="400" height="400" alt="42floors logo" typeof="foaf:Image" /> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><p>So you need to find new office space.<span>  </span>You do what all of us do these days.<span>  </span>You first ask Google (spoiler alert: you really should just go to 42floors).<span>  </span></p> <p><img alt="google-search-for-office-space.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/google-search-for-office-space.PNG" /></p> <p>You skip over the ads, because those are the guys that are paying to be in front of you.<span>  </span>The guys that rank # 1 after the ads are who Google really thinks you want to talk to.<span>  </span>When you rank # 1 on google for a competitive term like office space New York, that is very credible.<span>  </span></p> <p><img alt="space-for-lease-search-result.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/space-for-lease-search-result.PNG" /></p> <p>You click through to <a href="https://42floors.com/" target="_blank">42floors.com</a> and find TONS of space options.<span>  </span>For New York City, we found 4,134 listings, all uploaded within the last 90 days.<span>  </span>By the way, the listings on the site are powered by over 40,000 commercial real estate agents uploading their listings (for free...other listing curators charge brokers), and 42floors monitors over 10,000 landlord websites for space listings.<span>  </span></p> <p><img alt="new-york-city-office-space-options.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/new-york-city-office-space-options.PNG" /><span> </span></p> <p><span>There is also a cool chart on median rental rates, providing you a quick perspective on how many space options there are at different price points - a great way to get a feel for the market.<span>  </span></span></p> <p><img alt="median-rental-rates-new-york.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/median-rental-rates-new-york.PNG" /><span> </span></p> <p>As you browse the listings, you will notice that you can browse by popularity, date posted, and size.<span>  </span>The default setting is smart - it shows the freshest spaces first.<span>  </span>The stale listings get pushed down and are automatically deleted after 30 days.<span>  </span></p> <p><img alt="fresh-space-listings-are-at-the-top.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/fresh-space-listings-are-at-the-top.PNG" /></p> <p>When you click each listing you will receive detailed information about each property - enough for you to decide if you want to explore the space further.<span>  </span>You receive multiple, real photos of each suite, and all the static information about the building such as number of floors, year constructed, total building size, other available suites, and even information regarding the internet providers:</p> <p><img alt="internet-providers.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/internet-providers.PNG" /></p> <p>They even provide some key market node stats to see what has been the trend for the area.<span>  </span>In this case we can see that the NoMad neighborhood has trended up over time with higher than average rental rates, and smaller than average available spaces.<span>  </span></p> <p><img alt="area-real-estate-market-stats.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/area-real-estate-market-stats.PNG" /></p> <p>You can also put your office space requirement on autopilot by triggering an alert.<span>  </span></p> <p><img alt="create-an-office-space-search-alert.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/create-an-office-space-search-alert.PNG" /><span> </span></p> <p><span>By simply filling out the form, you will receive email updates that match your requirements.<span>  </span>Pretty simple, right?<span>  </span></span></p> <p><img alt="office-space-search-form.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/office-space-search-form.PNG" /><span> </span></p> <p><span>Each listing also allows you to get right in touch with the listing agent or landlord from as well.<span>  </span>Simply fill in your name, email and phone number and you can book a showing for any space you wish.<span>  </span></span></p> <p><img alt="listing-agent-contact-details.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/listing-agent-contact-details.PNG" /><span> </span></p> <p><span>At this point you can tour as many properties as you like with the individual listing agents.<span>  </span>What a great, free service.<span>  </span>So far you do not need a broker.<span>  </span></span></p> <p><span>This is where it gets interesting.<span>  </span></span></p> <p><span>Commercial real estate brokers are heavily screened and pay a fee to be a member of the site?s preferred brokers.<span>  </span>So now that you have found the perfect space through 42floors, they are also offering to play matchmaker between you and a qualified commercial real estate broker.<span>  </span>You can either work with the listing agent for the space directly without a broker, or select one of the agents to <a href="/blog/should-i-hire-exclusive-real-estate-broker">work with exclusively</a> on the site to help you close the deal.<span>  </span></span></p> <p><span>If you select a broker, you will not pay a fee - fees are paid by landlords.<span>  </span></span></p> <p><span>Says Jason Freedman, co-founder of 42floors, ?This is a great system, especially for tenants who do not already have a broker.<span>  </span>Our website averages the first or second position for office space searches amongst the top 200 markets in America.<span>  </span>Our database is robust and fresh and listing agents are notified immediately for office space tour requests.<span>  </span>Brokers get more exposure for their listings and also have an opportunity to represent tenants that want representation after the space has been found.<span>  </span>It is a win for everyone.</span></p> <p><span>This process is very frictionless and will perhaps become the way most tenants end up finding office space, instead of answering too many cold calls from brokers, <a href="/blog/7-things-consider-when-hiring-commercial-real-estate-agent">interviewing a few of them</a> and deciding on one.<span>  </span>Then trusting that one broker from cradle to grave on the office space search.<span>  </span></span></p> <p>Good luck with your office space search - it may be powered by 42floors. </p></div> <div class="bottom-links"> <div class="field--taxonomy-terms clearfix field field--name-field-blog-tags field--type-entity-reference field--label-above"> <div class="field__label">Post Tags</div> <div class="field__items"> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/71" class="taxonomy-term" hreflang="en">Site Selection</a></div> </div> </div> </div> </div> </div> Wed, 05 Apr 2017 19:36:40 +0000 jeff 438 at https://www.leaseref.com What is Flex Space? https://www.leaseref.com/blog/what-flex-space <div data-history-node-id="436" class="node node--type-blog node--view-mode-rss ds-2col-stacked-fluid clearfix"> <div class="group-header"> <div class="field field--name-node-title field--type-ds field--label-hidden field__item"><h2> What is Flex Space? </h2> </div> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field__item"><time datetime="2017-04-07T12:00:00Z" class="datetime">April 07, 2017</time> </div> </div> <div class="group-footer"> <div class="field field--name-field-blog-image field--type-image field--label-hidden field__item"> <img src="/sites/default/files/2017-06/flex-building.JPG" width="2272" height="1704" alt="flex space" typeof="foaf:Image" /> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><h1>What is Flex Space?</h1> <p>Flex space is short for flexible space.<span>  </span>Flexibility in this case refers to a range of ability to build out the space with varying degrees of office space vs warehouse space.<span>  </span></p> <p>Flex buildings are single storey properties and normally have multiple units.<span>  </span></p> <p>The parking ratio is high enough to support the units being built to be 100% office space.<span>  </span></p> <p>Flex space started to become very popular in the late 1990's when office tenants started to realize that they offer some great benefits over conventional office buildings.<span>  </span></p> <h2> </h2> <h2>Flex Building Benefits</h2> <h3>Lower Gross Up Factors</h3> <p>When you approach a flex building, you open a door to a unit and you are in the space - there is no shared building lobby area, and no common area hallways.<span>  </span></p> <p>Therefore, your <a href="/glossary-category?title=usable+area&amp;field_term_target_id=All">usable square footage</a> is also essentially your rentable square footage (except for some small landlord mechanical rooms).<span>  </span></p> <p>While a normal building square footage mark up factor is 15%, flex buildings are more like 1%.<span>  </span></p> <p> </p> <p><img alt="benefits-flex-space.jpg" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/benefits-flex-space.jpg" /></p> <p> </p> <p>So if you have a 5,000 square foot unit in a traditional building, it will be grossed up to be 5,750 square feet that you pay rent on.<span>  </span>A unit of the exact same size in a flex space would only be grossed up to be 5,050 square feet.<span>  </span></p> <p>For a more detailed look at building gross up factors, feel free to read this post:</p> <p><a href="/article/biggest-scam-commercial-real-estate-case-growing-building">The Biggest Scam in Commercial Real Estate - A Case of the Growing Building</a></p> <h3> </h3> <h3>Lower Realty Taxes</h3> <p>Real estate taxes are calculated based on a percentage of the value of a property and flex space buildings are typically valued at lower numbers than conventional office buildings. </p> <h3><img alt="flex buildings" data-entity-type="file" data-entity-uuid="9398703b-972d-4c53-af90-99f41af8106a" src="/sites/default/files/inline-images/flex-buildings.PNG" /></h3> <p> </p> <h3>No Elevator Costs or Wait Times</h3> <p>Since the buildings are single storey, there is no more waiting for the elevator, but the added bonus is that elevators are expensive to install and <a href="http://www.renown-electric.com/the-true-cost-of-poor-elevator-motor-maintenance" target="_blank">maintain</a>.<span>  </span>Those are costs that tenants pay for through their additional rent.<span>  </span></p> <p> </p> <p><img alt="flex-building-security.jpg" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/flex-building-security.jpg" /></p> <h3> </h3> <h3><span>Tenant Signage</span></h3> <p><span>Flex buildings can offer building signage for every tenant, compared to conventional office towers, which reserve tenant signage rights for only very large tenancies.  The ability to have top of building signage is also greater, compared to a low-rise suburban office building alternative, which typically reserves the top of building signage just for the anchor tenant of the building.   </span></p> <p> </p> <h3><span>Free Parking</span></h3> <p><span>As flex buildings typically are suburban buildings and are a modern development, they are designed with modern parking ratios in mind.  In the 70's, 3 spots per 1,000 square feet of rentable area was the standard.  In the 80's and 90's that compressed to 4 spots per 1,000 square feet as office space per employee was reduced.  Now we are seeing up to 6 spots per 1,000 square feet and new flex buildings are typically constructed with those ratios in mind. </span></p> <h3><img alt="flexspace" data-entity-type="file" data-entity-uuid="f312ea14-9da3-4911-bf9a-d29bc8846e79" src="/sites/default/files/inline-images/flexspace.PNG" /></h3> <p> </p> <h3>Higher Ceiling Heights</h3> <p>Conventional office buildings have 8 to 9 foot high ceilings, with dropped, T-bar ceiling tiles.<span>  </span></p> <p>Flex buildings offer the ability for tenants to have excessively high ceiling heights (in some cases up to 24 feet high).<span>  </span></p> <p>This allows for a really spacious feel and also allows for sound baffling in the form of voices and noises having to travel too far to reach the ceiling and echo back in a meaningful way.<span>  </span></p> <p><img alt="flex-space.jpg" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/flex-space.jpg" /></p> <h2> </h2> <h2>Flex Building Disadvantages</h2> <h3> </h3> <h3>Security Issues</h3> <p>Since flex buildings are ground floor spaces, they can be more vulnerable to "smash and grab" burglars that see laptops they want to steal.<span>  </span></p> <p>Many conventional office buildings offer a 24 hour security guard and flex buildings do not.<span>  </span></p> <p><img alt="flex office space" data-entity-type="file" data-entity-uuid="40761ecb-2623-4a9e-a549-9b29a0cd265a" src="/sites/default/files/inline-images/flex-office-space.PNG" /></p> <p> </p> <h3><span>No Underground Parking</span></h3> <p><span>Sorry folks.  These buildings just typically are not built with conservation of space in mind and it is extremely rare for them to offer underground parking - particularly since they offer less expensive rental rates and underground parking is expensive to build.</span></p> <h3> </h3> <h3>Views</h3> <p>Every flex property comes standard with a great view to your parking lot.<span>  </span></p> <p>While nobody is going to fall in love with that kind of view, maybe it will keep the employees focused on working!<span>  </span></p> <p><span>They also come with surface parking and typically do not offer any underground parking stalls.   </span></p> <p> </p> <p><img alt="what-is-flex-space.jpg" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/what-is-flex-space.jpg" /></p> <h3> </h3> <h3>Amenities</h3> <p>Unfortunately there are no amenities that come with flex spaces.<span>  </span></p> <p>For example, a 60,000 square foot flex facility will typically be broken down into two 30,000 square foot units, three 20,000 square foot units, or six 10,000 square foot spaces.<span>  </span></p> <p>In any of those cases, there will be no convenience store, restaurant or pub.<span>  </span></p> <h3><img alt="what is a flex space" data-entity-type="file" data-entity-uuid="07b79acf-176d-46aa-b254-d02d131e84c0" src="/sites/default/files/inline-images/what-is-a-flex-space.PNG" /></h3> <p> </p> <h3>Tenant Expansion Capability</h3> <p>While tenants can negotiate for <strong><a href="/blog/right-first-refusal-complete-tenant-guide">expansion rights</a></strong> in a tower or in a flex building, the availability of choices will tend to be much greater for tenants in towers, simply due to the fact that there usually is more total building square footage, and more tenants and more lease rollovers. </p> <h3> </h3> <h3>Conclusion</h3> <p>Flex space is not for everyone, but if you are a larger tenant (10,000 square feet+), have a stable business and want everyone in one suite and like to save money, flex spaces should be on your tour list. </p> <p> </p> <p>Have any questions we can help you with?  Whether it concerns flex space or any other commercial leasing matters, check out this video which details our process on how we may be able to help.  Or you can click <a href="/how-it-works"><strong>here</strong></a>.</p> <p> </p> <div class="video-embed-field-responsive-video"><iframe width="854" height="480" frameborder="0" allowfullscreen="allowfullscreen" src="https://fast.wistia.com/embed/iframe/shueekaldg?autoplay=0"></iframe> </div> <p> </p> <p><img alt="commercial-lease.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-lease.PNG" /></p> <p> </p></div> <div class="bottom-links"> <div class="field--taxonomy-terms clearfix field field--name-field-blog-tags field--type-entity-reference field--label-above"> <div class="field__label">Post Tags</div> <div class="field__items"> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/71" class="taxonomy-term" hreflang="en">Site Selection</a></div> </div> </div> </div> </div> </div> Sun, 02 Apr 2017 19:36:57 +0000 jeff 436 at https://www.leaseref.com What is the Difference Between A and B Class Buildings? https://www.leaseref.com/blog/what-difference-between-and-b-class-buildings <div data-history-node-id="433" class="node node--type-blog node--view-mode-rss ds-2col-stacked-fluid clearfix"> <div class="group-header"> <div class="field field--name-node-title field--type-ds field--label-hidden field__item"><h2> What is the Difference Between A and B Class Buildings? </h2> </div> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field__item"><time datetime="2017-04-01T12:00:00Z" class="datetime">April 01, 2017</time> </div> </div> <div class="group-footer"> <div class="field field--name-field-blog-image field--type-image field--label-hidden field__item"> <img src="/sites/default/files/2017-03/a-class-office-building.JPG" width="5184" height="3456" alt="a and b class office buildings" typeof="foaf:Image" /> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><h1>What is the Difference Between A and B Class Buildings?</h1> <p>First of all, this is a very subjective topic.<span>  </span>A, B and C class office buildings are general categorizations to denote the overall quality of office buildings.<span>  </span></p> <h2> </h2> <h2>What is an A Class Building?</h2> <p>A premier, first class office building.<span>  </span>This category also sub-categorizes buildings to AAA, AA and A minus categories.<span>  </span></p> <p><img alt="class a office space" data-entity-type="file" data-entity-uuid="153e0a39-ea92-4efa-97c4-8b84b7e11bc4" src="/sites/default/files/inline-images/class-a-office-space.PNG" /></p> <p>Commercial real estate agents and landlords would primarily agree that the degradation from AAA down to A minus is age related.<span>  </span>When new towers are constructed and are at the top of the building food chain, older generation buildings cannot truly compare, so over time a AAA will downgrade to AA and then down to A or A minus.<span>  </span></p> <p>While trophy buildings built in the 1970's or 1980's are still prominent business addresses, they do not carry the same prestige as the most modern buildings built today.<span>  </span>This is especially true since the new buildings are incorporating <a href="https://www.bisnow.com/national/news/other/10-cutting-edge-green-building-technologies-50570">great green technologies</a> to keep operating costs low.<span>  </span></p> <p>The criteria used to determine an A class building are:</p> <p><span><span>1.<span>       </span></span></span>Location</p> <p><span><span>2.<span>       </span></span></span>Amenities</p> <p><span><span>3.<span>       </span></span></span>Building size</p> <p><span><span>4.<span>       </span></span></span>Floor plate size</p> <p><span><span>5.<span>       </span></span></span>Tenant mix</p> <p><span><span>6.<span>       </span></span></span>Building systems - elevators, mechanical, HVAC, electrical</p> <p><span><span>7.<span>       </span></span></span>Finishes</p> <p><span><span>8.<span>       </span></span></span>Aesthetics</p> <p>Most building owners tend to overplay their building classes - for instance on a space tour, if they call their building an A minus, most real estate brokers would deem the building to be a B or B minus.<span>  </span></p> <p><img alt="a-class-building.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/a-class-building.PNG" /></p> <h2> </h2> <h2>What is a B Class Building?</h2> <p>Many B class buildings are just very old A class buildings.<span>  </span>They have degraded enough over time to drop down to B status.<span>  </span></p> <p><img alt="building class b" data-entity-type="file" data-entity-uuid="7527ebd8-1bbe-4b71-a8a4-1e4f8c7e615f" src="/sites/default/files/inline-images/building-class-b.PNG" /></p> <p>They tend to be utilitarian and practical but also very boring with nothing particularly special in the 8 criteria above.<span>  </span></p> <p>While many of the aesthetics and systems can be renovated or replaced, building size, floor plate and location cannot.<span>  </span></p> <p>The most common feature of a B class building would be a smaller floor plate size as the trend for A class buildings has been to increase the floor size, while older, B class buildings were frequently built with smaller floor sizes.<span>  </span></p> <p><img alt="b-class-building.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/b-class-building.PNG" /></p> <h2> </h2> <h2>What is a C Class Building?<span>  </span></h2> <p>These are really old buildings - typically in the range of 50+ years old.<span>  </span></p> <p>Many turn of the century buildings were built with very small floor plates, small elevators and small washrooms.<span>  </span>They trade at a much lower net rental rate and do not allow companies to grow too much due to the small floor size.<span>  </span>They are typically occupied by many small and start up companies, due to the small unit sizes, and reduced <strong><a href="/article/base-rent-vs-net-rent-vs-minimum-rent-vs-gross-rent">net rental rates</a></strong>.<span>  </span></p> <p> </p> <p><a href="https://www.leaseref.com" target="[objectObject]"><img alt="building class c" data-entity-type="file" data-entity-uuid="b80f6d98-5982-4a12-8aef-43af4cdebe94" src="/sites/default/files/inline-images/building-class-c.PNG" /></a></p> <p> </p> <p>Follow up reading: <a href="https://en.wikipedia.org/wiki/Office#Grading">https://en.wikipedia.org/wiki/Office#Grading</a></p> <p> </p> <p><img alt="c-class-building.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/c-class-building.PNG" /></p></div> <div class="bottom-links"> <div class="field--taxonomy-terms clearfix field field--name-field-blog-tags field--type-entity-reference field--label-above"> <div class="field__label">Post Tags</div> <div class="field__items"> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/71" class="taxonomy-term" hreflang="en">Site Selection</a></div> </div> </div> </div> </div> </div> Fri, 31 Mar 2017 21:42:53 +0000 jeff 433 at https://www.leaseref.com What is Building Gross Up Factor? https://www.leaseref.com/blog/what-building-gross-factor <div data-history-node-id="431" class="node node--type-blog node--view-mode-rss ds-2col-stacked-fluid clearfix"> <div class="group-header"> <div class="field field--name-node-title field--type-ds field--label-hidden field__item"><h2> What is Building Gross Up Factor? </h2> </div> <div class="field field--name-field-blog-date field--type-datetime field--label-hidden field__item"><time datetime="2017-05-03T12:00:00Z" class="datetime">May 03, 2017</time> </div> </div> <div class="group-footer"> <div class="field field--name-field-blog-image field--type-image field--label-hidden field__item"> <img src="/sites/default/files/2017-03/building-gross-up-factor.jpg" width="1000" height="668" alt="what is building gross up factor" typeof="foaf:Image" /> </div> <div class="clearfix text-formatted field field--name-body field--type-text-with-summary field--label-hidden field__item"><h1>What is building gross up factor?<span>  </span></h1> <p>For a detailed breakdown of this with a video, we wrote an article that talks about building gross up factor: <a href="/article/biggest-scam-commercial-real-estate-case-growing-building">A Case of the Growing Building</a>.<span>  </span>We also outline in our case studies a tenant who discovered a powerful savings when they found out just how much their space was being grossed up: <a href="/case-study/uncovering-135000-3000-square-foot-tenant">Uncovering $135,000 for a 3,000 square foot tenant</a>.<span>  </span></p> <div class="video-embed-field-responsive-video"><iframe width="854" height="480" frameborder="0" allowfullscreen="allowfullscreen" src="https://fast.wistia.com/embed/iframe/9mksfi9xbs?autoplay=1"></iframe> </div> <p> </p> <p>The Cliff Notes is that the space within individual suites is not what you pay rent on.<span>  </span>There is an add on factor...the common areas of a building are divided up among all the tenants in a building.<span>  </span></p> <p><img alt="usable-square-feet.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/usable-square-feet.PNG" /></p> <p> </p> <p>The common areas are the shared hallways, washrooms, and ground floor lobby areas.<span>  </span></p> <p>It also includes landlord rooms such as janitor closets, telecommunications rooms and mechanical rooms.<span>  </span></p> <p>It excludes major vertical penetrations like elevators, ducts, and stairwells.</p> <p>Let's say you find a space that is exactly 20 feet x 100 feet within the suite.<span>  </span></p> <p>The square footage of the premises is 2,000 square feet.<span>  </span>That is the usable area.<span>  </span></p> <p>A normal building would have about a 15% gross up factor, so the space would be marketed as a 2,300 square foot unit and that is what rent would be calculated on.<span>  </span></p> <p>2,300 is the rentable area and is what you pay rent on.<span>  </span></p> <p> </p> <p><img alt="typical-building-gross-up-factor.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/typical-building-gross-up-factor.PNG" /></p> <p> </p> <p>You could go to another building that has a suite with the exact same dimensions and if they have a larger ground floor lobby area, or if they have larger washrooms or wider hallways, the square footage could be 2,600 square feet.<span>  </span></p> <p>In that case, it would result in you paying 13% more in rent, but no extra space that you can use for your business.<span>  </span></p> <p>The problem with the commercial real estate industry is that gross up factors are not well understood by either tenants or commercial real estate brokers.<span>  </span></p> <p>Often the question of "what is the gross up factor?" is not asked.<span>  </span></p> <p>A tenant broker does not want to find out if the gross up factor for a building is not tenant-friendly because that could kill the deal.<span>  </span>Brokers get paid when deals happen - they do not get paid for truly defending the interests of tenants.<span>  </span><span>  </span></p> <p> </p> <p><img alt="building-gross-up-factor.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/building-gross-up-factor.PNG" /></p> <p> </p> <div class="video-embed-field-responsive-video"><iframe width="854" height="480" frameborder="0" allowfullscreen="allowfullscreen" src="https://fast.wistia.com/embed/iframe/dv62p27ryg?autoplay=0"></iframe> </div> <p> </p> <h2> </h2> <h3> </h3> <h3>How do I know what the building gross up factor is?</h3> <p>Landlords should have space plans that are certified by independent architects.<span>  </span></p> <p>While there can still be bias (architects that come up with landlord-favorable measurements have better odds of being retained by those landlords), they are also risking their reputations and licenses if they are coming up with measurements that are misleading.<span>  </span></p> <p>When you tour properties, ask each landlord what the building gross up factor is, and ask to see floor plans that are certified by an architect that show both the usable area calculation and the rentable area measurement.<span>  </span></p> <p> </p> <h3>What measurement method is used for commercial buildings?</h3> <p>As a general rule, office buildings are measured in accordance with BOMA (Building Owners and Managers Association).  There was a big change in 1996 from the 1980 BOMA standard.  That change was the introduction of the ground floor lobby area as part of the "common area".  </p> <p>It was no coincidence that this introduction coincided with the bottom of the market for the 90's.  </p> <p>All of a sudden landlords found new square feet to lease by amortizing the lobby square footage over the tenants in the building.  </p> <p>Office spaces are measured from the inside and the measurement goes to the "dominant portion" of the exterior walls - in other words, if a window takes up more than 50% of the exterior surface, the space is measured to the window.  There are no deductions for load bearing columns. </p> <p>The only area in an office building not measured is the major vertical penetrations, so if you have a landlord of an office building that is factoring in stairwells and elevators into the square footage, this is not normal.  </p> <p>Industrial spaces are typically measured from the outside.  This leaves less room for error - as most buildings are rectangular, the square footage is just the length x width and the useable area equals the rentable area.  The tenant is penalized on the square footage of the exterior walls, but ultimately the extra square footage puts downwards pressure on the rent per square foot as each tenant evaluates buildings relative to their overall budget for rent.</p> <p><img alt="gross-up-certified-by-architect.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/gross-up-certified-by-architect.PNG" /></p> <p> </p> <p>Then you can divide the two numbers to know the gross up factor.<span>  </span>15% is a general rule, but that number can also range from as little as about 5% to as high as 35%.<span>  </span></p> <p>In some cases if the gross up factor is very high, a landlord may have a plan in place to cap that gross up in order to be more competitive with other buildings.<span>  </span>However, if you are unaware of what building mark up factors are, it would not likely be something a landlord would volunteer.<span>  </span></p> <h3>Best of luck with your search, negotiation and improvement on your building gross up factor calculation!</h3> <p><strong>Other resources:</strong></p> <p>Space Database: <a href="http://www.spacedatabase.com/resources.html" target="_blank">Measurement Standards</a></p> <p>Property Metrics Website: <a href="https://www.propertymetrics.com/blog/2013/12/19/rentable-square-feet/" target="_blank">Difference Between Rentable Square Feet versus Usable Square Feet</a></p> <p>Still feeling stuck?  We can help with an <a href="https://www.leaseref.com/">online commercial lease review</a>.</p> <p><img alt="commercial-lease.PNG" data-entity-type="" data-entity-uuid="" src="/sites/default/files/inline-images/commercial-lease.PNG" /></p></div> <div class="bottom-links"> <div class="field--taxonomy-terms clearfix field field--name-field-blog-tags field--type-entity-reference field--label-above"> <div class="field__label">Post Tags</div> <div class="field__items"> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/72" class="taxonomy-term" hreflang="en">Negotiating</a></div> <div class="field-item--taxonomy-term field__item"><a href="/taxonomy/term/71" class="taxonomy-term" hreflang="en">Site Selection</a></div> </div> </div> </div> </div> </div> Fri, 31 Mar 2017 14:17:12 +0000 jeff 431 at https://www.leaseref.com